Consider the following statements about Self-Help Groups (SHGs):
(A) SHGs promote thrift in small proportions by a minimum contribution from each member.
(B) From the pooled money, credit is given to needy members, repayable in small instalments.
(C) A Community Investment Support Fund is provided to SHGs to take up self-employment.
(D) SHGs emerged because the formal credit system was fully integrated into rural community development.
(E) It is alleged that SHG borrowings are mainly confined to productive purposes.
Which of the statements given above are correct?
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → (A), (B) and (C) only
SHGs work on small savings and small loans. Two statements change one key word.
(A) SHGs promote thrift in small proportions by a minimum contribution from each member. — Correct. Each member makes a small contribution.
(B) From the pooled money, credit is given to needy members, repayable in small instalments. — Correct. Loans come from the pooled money.
(C) A Community Investment Support Fund is provided to SHGs to take up self-employment. — Correct. CISF funds self-employment.
(D) SHGs emerged because the formal credit system was fully integrated into rural community development. — Incorrect. Formal credit was not fully integrated, which is why SHGs came up.
(E) It is alleged that SHG borrowings are mainly confined to productive purposes. — Incorrect. It is alleged they are confined to consumption purposes.
NCERT (2026-27): “5.3 Credit and Marketing in Rural Areas … Recently, Self-Help Groups (henceforth SHGs) have emerged to fill the gap in the formal credit system because the formal credit delivery mechanism has not only proven inadequate but has also not been fully integrated into the overall rural social and community development. Since some kind of collateral is required, vast proportion of poor rural households were automatically out of the credit network. The SHGs promote thrift in small proportions by a minimum contribution from each member. From the pooled money, credit is given to the needy members to be repayable in small instalments at reasonable interest rates. By May 2019, nearly 6 crore women in India have become member in 54 lakh women SHGs. In recent years, about ₹ 10-15,000 per SHG and another ₹2.5 lakhs per SHG as a Community Investment Support Fund (CISF) are provided as part of renovating fund to take up self employement for income generation. Such credit provisions are generally referred to as micro-credit programmes. SHGs have helped in the empowerment of women. It is alleged that the borrowings are mainly confined to consumption purposes. …” |